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* Q2 full-price sales up 0.3 pct vs 0.9 decline in Q1
* Narrows FY sales guidance to -2.5 pct to +2.5 pct
* Shares rise 4.7 pct (Adds FD comment, analyst comment, share price)
By Sarah Young
LONDON, Aug 3 (Reuters) - Next, one of Britain'sbiggest clothing retailers, reported a pick up in sales in itssecond quarter and said it had not seen a big impact on demandso far from Britain's vote to leave the European Union.
Several surveys have reported a drop in consumer confidencefollowing the shock "Brexit" vote on June 23. But so far, therehave been few signs of that translating into lower spending.
In its first update since the referendum, Next said it hadnot seen an impact on sales, apart from in the first few daysimmediately after the vote.
The company reported a 0.3 percent rise in full-price salesin the three months ended July 30, improving on a 0.9 percentfall in its first quarter, which followed its warning in Marchthat 2016 could be its toughest year since 2008 as consumerspending deteriorated.
That performance showed Next was continuing to outperformrival Marks & Spencer, which in July posted an 8.9percent fall in underlying sales of clothing and home products,its biggest fall in quarterly clothing sales for over ten years.
"We see this as a considerable delivery given the currentenvironment for traditional retail businesses," Shore Capitalanalyst George Mensah said of Next's performance.
The company's shares were up 4.7 percent at 5,365 pence at0755 GMT, edging back towards the 5,535 pence level where theywere trading before the Brexit vote sent them plunging as muchas 35 percent on concerns about weaker consumer spending.
For the year ending January 2017, Next forecast full-pricesales would be in a range of down 2.5 percent to up 2.5 percent,narrowing a previous view of down 3.5 percent to up 3.5 percent.
BREXIT IMPACT
Next said it was too early to tell what the impact of theBrexit vote would eventually have on consumer demand, and blamedvolatile trading on an underlying weakness in demand forclothing which dates back to last October.
That volatility meant Next's sales outlook range was widerthan usual.
"We deliberately left it wider because of the uncertaintyand the volatility on a week by week basis," Finance DirectorAmanda James said in an interview.
Next forecast full-price sales growth would be worse in thecurrent quarter than in the second quarter given a toughcomparison, but James suggested Brexit could also benefit Nextif Britons shy away from expensive purchases, such as cars andholidays, and spend money on clothes instead.
One Brexit impact that was clear, however, was thedevaluation of the pound since the vote, the company said. Thatwould mean Next's input costs would rise by about 5 percent onlike-for-like products from 2017/18. The retailer was protectedfrom that until January thanks to currency hedging.
($1 = 0.7514 pounds) (Editing by Louise Heavens and Mark Potter)
